Budget Office report credits immigration and spending deals with improved outlook despite huge debt

WASHINGTON (AP) — The nonpartisan Congressional Budget Office said Wednesday that it expects the federal government to be awash in debt over the next 30 years, but the outlook has improved over the past year due to increased immigration and agreements to reduce spending.

The CBO’s latest long-term budget and economic outlook report — for a timeframe that spans 2024 to 2054 — projects publicly held debt to reach 166% of gross domestic product, or GDP, in 2054. That’s down from the agency’s June 2023 long-term budget projection, which said publicly held debt would be equal to a record 181% of American economic activity by 2053.

The CBO attributes the expected increase in economic growth to “stronger growth of the potential labor force over the next 10 years, largely driven by increased net immigration, and faster capital accumulation over the next 30 years.”

In the nearer term, by 2029, public debt is expected to reach 107% of GDP, surpassing the historical peak it reached after World War II, according to the report released Wednesday.

The CBO report outlines the necessity for an immigrant workforce to help the nation’s economy grow — otherwise the nation’s population is expected to shrink into 2040 without immigration.

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